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Baby Please Don’t Go

American women had babies at record-low rates last year and pushed U.S. births down to their smallest total in 35 years. About 3.75 million babies were born in the U.S. in 2019, down 1% from the prior year, provisional figures from the Centers for Disease Control and Prevention’s National Center for Health Statistics showed. The general fertility rate fell 2% to 58.2 births per 1,000 women aged 15 to 44, its lowest level since the government began tracking the figure in 1909, Janet Adamy reports.

The data are the latest sign of how American childbearing, which began declining during the 2007-09 recession, never fully rebounded when the economy bounced back. Millennials have been slower to form families than previous generations, in part, economists say, because they are less financially secure than those before them.

WHAT TO WATCH TODAY

Bank of England Gov. Andrew Bailey speaks on the economic impact of coronavirus in a Treasury Committee hearing at 9:30 a.m. ET.

Eurozone consumer confidence for May is out at 10 a.m. ET.

The U.S. quarterly services survey for the first quarter is out at 10 a.m. ET.

Atlanta Fed President Raphael Bostic speaks on the Fed’s response to Covid-19 at 10 a.m. ET and St. Louis Fed President James Bullard speaks on the pandemic and the economy at 12 p.m. ET.

The Federal Reserve releases minutes from its April 28-29 meeting at 2 p.m. ET.

Japan's trade numbers for April are out at 7:50 p.m. ET.

TOP STORIES

The Shape of Things to Come

The Trump administration is counting on a sharp bounceback for the economy. The Federal Reserve, not so much. Treasury Secretary Steven Mnuchin, appearing alongside Fed Chairman Jerome Powell at a Senate hearing, favored a wait-and-see approach to more federal aid and echoed comments by President Trump and other administration officials who are predicting a V-shaped recovery—a sharp downturn followed by a strong bounceback. Mr. Powell, for the third time in a week, suggested additional spending by Washington could be needed to prevent long-term damage from high unemployment and waves of bankruptcies, Nick Timiraos and Kate Davidson report.

The Congressional Budget Office said the U.S. economy’s recovery will drag on through the end of next year, as investment collapses and the labor market experiences its sharpest deterioration since the 1930s. Gross domestic product will likely be 5.6% smaller in the fourth quarter of 2020 than a year earlier despite an expected pickup in economic activity in the coming months, Paul Kiernan reports.

What are markets saying? Yields on U.S. government bonds have stalled near all-time lows, a sign investors are anticipating a painful economic recovery and years of aggressive monetary stimulus.

I’m Looking to the Sky to Save Me, Looking for a Sign of Life

Airline executives said people are starting to book flights again and cancellations have slowed, a potential inflection point after the coronavirus pandemic decimated travel demand. United Airlines said it would restore some capacity in July, Southwest Airlines said its flights are 25% to 30% full—not the 10% it anticipated—Delta said sales have exceeded refunds on some days recently, Alison Sider and Doug Cameron report.

U.S. states and governments around the world are trying to revive their economies. Slight declines in new cases in some states have prompted governors from New York to Ohio to reopen services—to varying extents—including restaurants, churches and schools, Chuin-Wei Yap reports.

National restaurant chains and other stable businesses are prodding their landlords for rent relief as the economic picture sours. Chipotle Mexican Grill and Shake Shack said they are lobbying property owners to renegotiate the leases or offer deferred rent payments. Starbucks sent a letter to landlords asking for a range of concessions, Esther Fung and Heather Haddon report.

Some of the biggest U.S. retailers are ending the extra pay they gave to front-line workers as coronavirus-related costs pile up and the ranks of jobless Americans surge, tipping the labor market in employers’ favor. Amazon.com, Kroger and Rite Aid are among the major companies that have ended or plan to stop paying higher wages for tens of thousands of workers, Jaewon Kang and Sharon Terlep report.

Florida’s problem-riddled unemployment system is emerging as the face of national frustration and angst felt by workers sidelined by the coronavirus pandemic. A number of states’ unemployment systems have suffered delays and other glitches due to a historic surge of applicants and faulty computer systems. Florida, though, has seen sustained issues, and outrage continues to build, Alex Leary reports.

The Census Bureau's quarterly services survey is out today at 10 a.m. ET. The report usually flies under the radar, though it’s an important source of hard data on how much consumers are spending on taxis, internet connections, lawyers, baseball tickets, hip replacements and a wide array of other services. It’s a lot—services spending was 47% of gross domestic product last year. But the QSS isn't available when the Commerce Department releases its first calculation for GDP, so the agency makes some estimates. Those estimates reflected a sharp drop—first-quarter services spending was down 10.2% at a seasonally adjusted annual rate. J.P. Morgan Chase figures incoming hard data could be even worse. For example, Commerce’s estimate of spectator sport consumption tumbled—but not by nearly as much as might be expected. “We think that the services data will be important to watch for a potential downward revision to 1Q20 GDP,” economist Daniel Silver writes.

WHAT ELSE WE’RE READING

How persuasive is Fox News? "The average partial effect of Fox News viewership in a zipcode implies that 1 percentage point increase in cable viewership reduces the propensity to stay at home by 8.9 percentage points compared to the pre-pandemic average. We find a persuasion rate of Fox News on non-compliance with stay-at-home behavior during the crisis of about 33.5%-50% across our various social distancing metrics," Columbia University and Chicago Booth economists write in a Becker Friedman Institute working paper.

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